Utility Regulation Training Course
Mar 07-08 2017

Utility Regulation Training Course

An in-depth course on the regulation of utilities and other markets with regulated infrastructure

Central Location, London
Jump to section »

Attendees left the course with practical knowledge of the fundamentals of price controls including assessment of efficient costs, cost of capital and financeability and incentive schemes.

Being delivered by senior-level experts from Europe Economics, this course provided a comprehensive insight into the methods used by utilities regulators, while examining the implications of their approaches. The syllabus was designed to deliver a diverse range of sessions that will be relevant to all departments, including strategy, finance, regulation and compliance.

 

Key benefits of attending included:

  • Discovered the methods used to calculate price controls
  • Learned how regulators determine what costs to allow within price limits
  • Gained practical insight into how the cost of capital is estimated
  • Examined the role of incentive schemes and the different approaches
  • Discussed the issues in an interactive forum with like-minded peers from various sectors


 

Our 2016 trainers

Dermot Glynn is the founder of Europe Economics. He has overseen the successful execution of a wide range of projects for a variety of utility and other regulatory clients, both public and private sector. Previously, he has been Chief Economist at KPMG, Economic Director at the Confederation of British Industry, and a member of the Department of Applied Economics at Cambridge University. Since 2011 he has been a member of the Competition Appeal Tribunal.

Stephen Topping is a Managing Consultant who has led many of Europe Economics’ utility regulation projects. He has over 10 years’ experience advising clients across a range of utilities sectors, including clients in the energy, water, airports and telecoms sectors. He has advised on many aspects of utility regulation, including the design of regulatory frameworks, cost of capital and comparative efficiency. He has worked on secondment within the OFT and Ofcom.

Dr Andrew Lilico is a Director of Europe Economics and is a leading finance expert. He has directed major projects on the cost of capital, pharmaceuticals, competition, and impact assessment. He has lectured at UCL in Corporate Finance, Money and Banking, and Macroeconomics. He is a member of the IEA/Sunday Times Shadow Monetary Policy Committee, and is a frequent commentator on the BBC, Sky, Bloomberg and CNBC.


Agenda

Print Programme

Tuesday, 7th March 2017

10:00
Introduction to course
  • Purpose and format of course
  • Welcome and introductions 
10:15
Key principles of utility regulation
  • Why regulate utilities?
  • Role of independent regulators
  • Rate of return versus RPI-X regulation
  • Periodic reviews and appeal mechanisms 
11:15
Refreshments
11:30
Building blocks of price controls
  • Operating expenditure (opex), capital expenditure (capex), regulatory asset value (RAV) / regulatory capital value (RCV), depreciation, and weighted average cost of capital (WACC)
  • Valuing the asset base
  • Depreciation policy and asset lives
  • How price controlled revenues are calculated from the building blocks
  • Profiling of revenue (P0 and X factor) 
12:30
Lunch Break
13:30
Break-out session: building a simple financial model

In this session attendees will break out into smaller groups to practice building up price controlled revenues from the building blocks using Excel models. Doing the calculations with the illustrative data provided will help attendees to cement their understanding of how the process works. 

14:30
Assessing efficient costs
  • Collecting information – regulatory accounts and business plan questionnaires
  • Assessing case for proposed capital expenditure
  • Bottom-up and top-down assessment of cost efficiency
  • Overview of econometric approaches (for non-specialist)
  • Catch-up and frontier shift 
15:30
Refreshments
15:45
Break-out session: assessing efficient costs

Breaking into small groups, delegates will perform an interactive case study, with each group focusing on a different perspective. For example:

  • Company perspective – putting the case for opex and capex proposals
  • Regulator perspective – assessing what costs should be allowed
  • Customer perspective – advocacy on behalf of customers 
17:00
Wrap-up from break-out session
  • Each break-out group to present back to overall group
  • Different perspectives compared / debated
  • Share and discuss the key lessons to take away from each break-out group
17:30
Close of Day One

Wednesday, 8th March 2017

09:30
Quick refresher session
  • Brief overview of what was covered on previous day
  • Introducing the key topics for Day Two
09:45
Cost of capital and financeability
  • Definition and role of cost of capital
  • Types of risk and the Capital Asset Pricing Model (CAPM)
  • Cost of equity: risk free rate, equity beta and equity risk premium
  • Cost of debt: risk free rate and debt premium
  • Gearing and taxes
  • Financeability 
11:00
Refreshments
11:15
Break-out session: assessing the cost of capital

Breaking into small groups, delegates will be given an interactive case study involving  tasks that consider different aspects of the WACC and financeability. Topics include:

  • Risk free rate
  • Equity beta
  • Equity risk premium 
  • Debt premium
  • Gearing and financeability 
12:15
Wrap-up from break-out session
  • Each break-out group to present back to overall group
  • Share and discuss the key lessons to take away from each break-out group
12:45
Lunch Break
13:45
Mechanisms for dealing with risk and uncertainty
  • Risks born by price regulated firms
  • Why use risk mitigants?
  • Adjustments requiring regulator input and automatic adjustments
14:15
Incentive schemes
  • Rolling opex and capex efficiency incentives
  • Incentives for quality of service
  • Incentives for submission of appropriate capex plan 
15:00
Break-out session: incentives for quality of service

Breaking into small groups, delegates will be given an interactive case study with each group focusing on a specific perspective. For example:

  • Company perspective – seeking rewards and minimising financial exposure
  • Regulator perspective – balancing statutory duties
  • Customer perspective – taking account of customer preferences 
16:00
Refreshments
16:15
Wrap-up from break-out session
  • Each break-out group to present back to overall group
  • Different perspectives compared / debated
  • Share and discuss the key lessons to take away from each break-out group
16:45
Course summary and conclusions
  • Brief summary of what has been learned during course
  • Final opportunity to ask questions 
17:00
Close of Day Two

Print Programme

Register

20%
Save 15%
Group bookings: 10% discount for 2 attendees,15% for 3 attendees, 20% for 4+ attendees.
- +
£1,345.00 + VAT Until 03/02/17
£1,495.00 + VAT Standard
Discount
-£315.00
VAT
£150.00
TOTAL
£1250.00

Copyright © 2017, Marketforce. All Rights Reserved.

Site by

Copyright © 2017, Marketforce. All Rights Reserved.

Site by